My signature below certifies that I have complied with the University of Pennsylvania's

Code of Academic Integrity in completing this take-home examination. All work

presented below is my own. Also, I will not share the contents of the exam or my
response with other students.
-- Jeffrey Rable, December 10, 2014

Short Answer 1:
A high degree of nostalgia for the Soviet era between 1998 and 2000 could be attributed to a
handful of factors Russia's economic crisis, the decline of Russian superiority, and a general
breakdown of the Russian state that occurred in the 1990's.
Firstly, and most importantly, the economic crisis had a number of effects that decreased the
population's living standards. The ruble's value dropped so much that families lost their entire
savings, and industrial output plummetted to less than half of where it was under the USSR (Stiglitz,
1, 3). People who spent their entire lives with price controls on necessities, 100% employment, and a
strong social safety net now had to contend with poverty and unemployment.
Secondly, around this time, it also became evident that Russia had little to no power in
international relations. During the Soviet era, NATO would not have dared to attack any countries in
Eastern Europe to avoid risking USSR retaliation. However, in the 90's NATO had no problem
bombing Kosovo and expanding into the former Eastern Bloc (Cohen, 3).
Lastly, the Russian state finished out the 1990's incredibly weak. Yeltsin hemorrhaged the
state to maintain political control, weakening the military, designing a poorly functioning federal
system, and allowing the oligarchs to seize political influence (Wegren 298, 299). Additionally, some
governors caused additonal issues for the state by interfering in tax collection and the paying of
benefits (Wegren, 68).
Overall, a high degree of nostalgia for the Soviet era in the late 1990's in Russia is relatively
understandable the state declined economically and become impotent on both an international and
national level.

Short Answer 2:
The reasons why Putin were voted into the presidency in 2012 are almost exactly the
opposite of why the Soviet era was yearned for in the late 1990's under him, the economy bustled,
the Russian state regained strength, and Russia became an important international player.
Firstly, the economy under Putin has been vibrant; even though it may not have totally been
the result of his policies, Russia saw high annual growth consistently throughout the early 2000's.
Additionally, they entered the BRICS, an important economic bloc, and the expansion of the oil and
gas industry has brought a great deal of wealth to the country. Putin also worked to rein in the
oligarchs, such as through the seizing of Yukos oil, presenting himself as working to fix the flaws of
the economy born in the Yeltsin transitional era (Sil, Comments on Yukos, 2).
Secondly, Putin has standardized and strengthened Russia's federal system. Through creating
a handful of super region heads to monitor the government and changing the selection of governors
from popular vote to appointment by the Duma, he worked to create a standardized legal system
throughout Russia. This increased standardization has made the state more orderly in general
(Wegren, 80).
Lastly, Putin has brought Russia back in as an international player. Through a leaning out and
strengthening of the military, he's enabled Russia to carry out swift and effective attacks as necessary
(Wegren, 305; Chang 4). This has allowed Russia to retain control of Chechnya, place military
pressure on Georgia, and rapidly seize Crimea during the Ukrainian crisis. Additionally, through the
Ukrainian Crisis, Putin has demonstrated Russia's ability to resist the influence of the West and
intervene in matters as it sees necessary, portraying himself as strong domestically.

Short Answer 4:
Russia's economy differs from the typical Western capitalist economy in that it is founded on
a strong central state and revolves around compromise between private companies and the

government. Additionally, these lasting effects are partially the legacy of the transition from a
command economy in the 1990's.
One of the primary differences between Western and Russian capitalism is the existence of the
oligarchs. These oligarchs, who came from the waves of privatization in the early 1990's, own vast
segments of the Russian economy and cannot simply be written off by the government. Though the
government can take action against them, as seen when Yukos Oil was nationalized, it appears to
prefer to deal with the oligarchs as necessary. Khodorovsky, the oligarch in charge of Yukos Oil,
worked to destabilize the government, rather than work with it this could be one of the primary
reasons that Putin targeted him wth charges of corruption. Additionally, it is likely that Putin wishes
to maintain greater control over certain industries in particular, like the oil industry, to exert a
stronger influence on the economy as a whole (Sil, Comments on Yukos, 2).
Furthermore, in Russia, the hand of the government can be seen as directing the economy as
a whole, unlike in the West, where the "Invisible Hand" is allowed to direct the economy. As
Goryunov points out in his article "Preparing Russia's Economy for the Great Leap Forward", Putin
and Medvedev are pushing Russia into new sectors, such as biotechnology and nanotechnology,
through the formation of a new economic think tank and the appointment of Sergei Glazev as an
economic advisor. Though Glazev is mostly in charge of economic integration in Russia's Eurasian
Union, he represents a new Russian view of the economy in which nationalization and other nonneoliberal policies are implemented (Goryunov, 2).

Short answer 6:
Russia's declining population, at the present moment, does not appear to be a great hindrance
moving forward, and may even offer slight benefits. While the population is declining, which has the
potential to lead to an aged population and the inability to fill jobs, it is not declining anywhere near
as fast as it was in the early days of the Russian Federation.
During the 1990's, the transition to capitalism in Russia brought a number of crises, such as
the hyperinflation and the financial crisis, that resulted in reduced living standards. These factors led

to a drastic decrease in the birth rate, as it would have been difficult to feed and care for a child.
These reduced living standards also decreased the average Russian's life span shortages of food,
increased alcoholism, and decreased access to healthcare during the transition increased the death
rate, a rare phenomenon in developed countries. The decreased birth rate coupled with the increased
death rate would have led to a massive depopulation of nearly 30% by 2050 (Sil, Russia in the
Global Economy, 17).
However, recently, the situation has improved greatly. With the improved economy and living
standards in the early 2000's, the death rate dropped and the birth rate began to increase again. On
top of this, immigration increased and the Russian government began to subsidize couples having
multiple children. Presently, the population decline does not seem too precipitous, though, as
Adomanis points out, population estimates are difficult to make and must be adjusted as the variables
change (Adomanis, Russian Demography and the Difficulty of Prediction, page 2).
Moving forward, Russia's population decrease will present some challenges. However, at the
same time, it will also ensure that the populace has abundant natural resources and land, which will
be critical in the future (Sil, Russia in the Global Economy, 14).

Essay ideas:
Russia's Future challenges:
Economic diversity and diverging from oil pushing new tech sector, nationalization a la Yukos
Dealing with oligarchs
Slight population decline making decent progress via subsidies, improved living stds
Improving state of Civil Society participation arising mostly from foreign NGOs?
Need more grassroots
International competition
Despite antagonizing NATO, BRICS, Eurasian Union
Push for multipolarity
disintegration:
Total economic disaster
largest public -> private transition in history
Price controls, economic collapse
Social changes
Total disaster, normalcy erodes, alcoholism, life expectancy drops
Economic collapse -> everyone got rekt
Politcal
Strong state needed -> collapse of post soviet setup w/ new constitution
Federalism
Tight union screwed by bilateral federalism, regional govs

Effects of simulataneous economic + freedom changes

Comm pushback
Compare to Chinese model
Confidence of stability yeah, sure
Poltical
Strong central gov with public support
State strengthened in recent years federalism issues way better
Relatively unified, gets stuff done (UR, Meddy, Putin)
Plurality, free elections, freedom to protest etc within reason
Social/Cultural
History of autocracy
Most Russians generally don't care about liberal democracy
"Normalcy" and generally good lives more important
Foreign Relations
+BRICS
+Eurasian Union
+Leaned out, effective military
-NATO
-Ukraine mess
Economics
Oil + gas
Not as bad as petro states, closer to Norway but still more dependent
Huge benefits, could be bad if prices stay as low as they are
(even factoring in 5 years of prices isn't sufficient atm)
Working on investing in more things (nano, bio, info tech)
Sanctions
blip vs constant
Oppurtunities and challenges Moving Forward
Demography
Not as bad, could potentially be beneficial
Natural Resources
Foreign Relations
Ukraine mess
NATO
Moving away from oil/gas dependence
In progress, not always easy tho
Sanctions
maybe some lingering federalism issues

Essay:
The period of the disintegration of the Russian state has recently come to an end. After years
of collapsing politically, economically, and socially, Russia is finally on a post-transitional rebound.
With an abundance of natural resources, a strengthened, centralized state, and a returned sense of
normalcy, the government has successfully brought Russia back from the brink of disaster. Similarly,
despite some coming economic and demographic challenges looming, longstanding trends seem to

imply that this current iteration of the Russian state is here to stay.
The Russian state first began to fall apart shortly into the transition from a command
economy to a free market economy. In the early days of the transition, a number of groups, including
the United States and the IMF, promoted the idea of "Shock Therapy" the idea that a quick transition
to capitalism through rapid price liberalization, marketization, and privatization would avoid political
backlash and a return to communism. However, at the same time, the speed of these transitions, as
noted by the group that wanted to gradually transition the economy, would have long lasting results,
and, if any policies failed, Russia would have to live with the economic and political consequences
(Stiglitz, page 1).
The first consequences of the rapid transition were hyperinflation, which occurred as price
controls were lifted and allowed to soar out of control, and the exploitation of Russia's still-in-place
price controls on natural resources. Though price controls kept natural resources cheap domestically,
the new markets enabled some clever entrepeneurs to export resources onto the world market at a
large profit. These two results began to breed corruption in Russia, leading to the creation of the
oligarchs and the increasing exploitation of government policies (Stiglitz, 2). As the transition
continued, privatization proved especially exploitable. Through a poorly implemented voucher
program and a misguided loans-for-shares program, the vast majority of Russian industry ended up
in the hands of the oligarchs, often for bargain prices in corrupt sales (Rutland, 343). Janine Wedel,
in her short editorial "How the Chubais Clan, Harvard Fed Corruption", goes so far as to claim that
the Russian economic reforms were inherently corrupt and that the leaders of the reform were out to
benefit a select few (Wedel, page 2).
On top of totally dismantling and restructuring the Russian economy, these transitional
policies also led to the decline of Russian society. Between a decreased life expentancy, skyrocketing
alcoholism, the destruction of savings (via hyperinflation), and an unemployment level over 0% for
the first time in decades, the average Russian encountered rough times during the transition; even in
January of 2000, only a mere 13% of Russians found their society to be somewhat or definitely
normal (getting 11% and 2% of the vote respectively) (Rose, 78). Around this time, Russians also

had to find a new identity most Russians felt more attached to the USSR at the time of its dissolution
than the new Russian state, leading to a decohesive society (Godzimirski, 4-6).
Concurrently with its economic and social changes, Russia was undergoing a political
collapse of sorts. Early in the days of the transition, Boris Yeltsin destroyed the Russian parliament,
which Ruslan Khasbulatov argues was one of the most democratic institutions in Russian history, to
keep pushing through economic reforms (Khasbulatov, 1). He then proceeded to rapidly enact a new
constitution, giving himself strong presidential powers that allowed him to override the newly elected
Duma when he wished to pass unpopular reforms, such as his privatization schemes (Rutland, 343).
At the same time, Yeltsin was also weakening the power of the central government through
the signing of new, asymmetric deals with some regions of Russia. Through these deals, regional
leaders gained much more power than one would typically expect in a federal system, giving them
the ability to wreak havoc in their areas. Using their powers to benefit themselves and their allies,
regional leaders often harassed political opponents, created policies to benefit certain businesses at
the expense of others, and generally interfered with the economic and political transition occurring
(Wegren, 68).
When one closely examines Yeltsin's actions in the early and mid 1990's, it becomes apparent
that one of his main motivations for enacting certain deleterious policies was his desire to be reelected. Had the Russian government not enacted (relatively) free elections in the early days of the
transition, Yeltsin would not have needed to push through such damaging privatization policies or set
up his asymmetric federal system. Rutland argues that, during the transition to a market economy,
politics are one of the main driving forces behind policy-making, and that Yeltsin enacted his loansfor-shares program to gain the poltical support of the oligarchs in the 1996 elections (Rutland, 350
and 343). Similarly, Nikolai Petrov and Darrell Slider argue that Yeltsin's dealmaking with Russia's
autonomous regions was to gain their loyalty during his power struggle with Khasbulatov and the
Congress of People's Deputies in the early days of the transition (Wegren, pages 65 and 66). One can
also examine the effect of democratization on market reform by comparing Russia to China, which
enacted economic reform without political reform. Rutland notes that China's strict political control

allowed the ruling elite to maintain legitimacy and monitor the reforms, while in Russia the politcal
elite fragmented and tore the state apart to maintain their power (Rutland, Russia and China
Compared, 6-7).
Despite the political, economic, and social issues that developed in Russia in the 1990's,
under the leadership of Vladmir Putin, the state has strengthened and Russian society has generally
improved. Some aspects of this reversal could be viewed as an eventuality, such as the economic
turnaround, while others, such as the strengthening of the state, can be directly attributed to Putin's
policies. Others still, such as the societal and demographic changes occurring in Russia recently, can
be attributed to both economic and political changes. However, out of these developments arose a
stable Russian state and an end to the state's decay.
The economic rebound in Russia in the early 2000's can be attributed partially to the increase
in oil prices that occurred throughout the early 2000's. Rutland specifically notes that the booming
oil prices in the 2000's, combined with a Russian advantage in the energy and metals sector, were a
huge driving factor in Russian growth (Rutland, 355). Additionally, Daniel Treisman partially
attributes both the Soviet economic decline of the 80's and the Russian economic decline of the 90's
to a decrease in oil and commodity prices during this time (Treisman, 85).
However, Putin's economic and poltical policies have also had a drastic effect on the Russian
economy. Through centralizing the state, Putin edged out competing regional governments and
oligarchs, enabling him to enact more market reforms and continue to liberalize the economy
(Wegren, 80). For example, though it took years, Putin's government successfully martketized a
number of difficult industries, such as the electricity and banking industries (Rutland, 353-354).
Russia's political stability has also vastly improved since Putin came to power. First and
foremost, he reined in the oligarchs and has sought to deal with them, rather than appease them. In
the days of Yeltsin, the oligarchs gained vast amounts of political power through their media
apparatus and wealth. However, Putin has contained their influence through the seizing of certain
sections of the media, as well as demonstrating, through the Yukos situation, that political
competition from the oligarchs is not welcome (Sil, Comment on Yukos, 2). Additionally, through

the appointment of super-regional heads over certain parts of Russia and the removal of popular
elections for regional governors, Putin has dismantled the regional power structures set up in the
Yeltsin era. Through tearing apart these regional structures, he shifted a number of powers, such as
the power to deal with the oligarchs, to the central government (Wegren, 80). Ultimately, by
recentralizing power and diminishing the influence of self-serving groups, Putin successfully
restabilized the Russian government.
The Russian state is also heavily supported by Russian society, which has recovered from its
erosion in the 1990's. Between January 2000 and April 2007, the amount of Russians that believed
their society was normal increased by a staggering 33%. Two factors that could explain this increase
are the drastic improvement in the Russian economy and living standards after the turn of the
century, and the strengthening of the Russian state; Russians believe that order and the economy are
two of the most important factors in determining normality (Rose, 79-80). To some degree, the
current backing of the state could also be attributed to the creation of a new Russian identity, which
Putin cleverly crafted so that most of society could stand behind it (Godzimirski, 14). Furthermore,
society's support for the current regime is demonstrated through various elections both United
Russia and Putin dominate Russia's relatively free elections and maintain high approval levels (Sil,
Comment on 2011 Elections, 2-3; Adomanis, 3; Moscow Times article on Levada Center polling
results in August, 2014).
While social, economic, and political changes through the last decade have strengthened
Russia as a whole and reversed its decay, Russia still faces many challenges and oppurtunities in the
next few decades. Though the oil boom helped to bring the economy back from the brink of disaster,
it also opens Russia up to the issue of the "resource curse". Additionally, Russia's relative lack of
economic competition and declining population could also present both a threat and an oppurtunity
to the state for years to come.
Firstly, although Russia's dependence on oil has the potential to be a problem, Russia is not
overly dependent on it when one compares Russian dependence on oil with that of other states, it
more closely resembles Norway, a highly stable, developed state without too large of an oil

dependence, than a petro state like Saudi Arabia (Sil, Russia in the Global Economy, 7, 9, 13). On
top of this, Russian leaders know that oil has the potential to be a problem both Putin and Medvedev
have emphasized investing heavily in new areas, such as the technology sector (Goryunov, 1).
Additionally, Russia's strong state can help mobilize the economy to minimize oil dependence in the
future (Tsygankov).
Secondly, while the lack of competition in some select Russian industries may affect
economic stability, the overall effect of this in the long term is uncertain. Some argue that, so long as
commodity prices continue to rise, a lack of competition should not hurt the economy as a whole.
Furthermore, this lack of competition arises partially from political elites having influence over
certain companies, which creates a politically stable arrangement (Rutland, 357).
Finally, the declining Russian population has the potential to be a severe threat. In the 90's,
with a precipitous drop in birth rate and an increase in death rates, the Russian population looked
like it would decrease heavily by 2030 (Adomanis, Russian Demography 2, pages 2-4). However,
since then, with its economic recovery and increased state intervention (such as subsidies on couples
having multiple children), the birth and immigration rates have recovered quite a bit and now only a
slight decline is predicted (Adomanis, Russian Demography 1, pages 1-2). Though demographic
prediction is notably fickle and difficult to perform accurately, only a slight decline in population
presents Russia with some unique oppurtunities. While it will face the issue of an aging work force, it
will not have to worry about shortages of food, resources, or land like many other states, such as the
BRICS. Because of its population decline, it can also focus on human development, possibly
allowing it to catch up to Western Europe (Sil, Russia in the Global Economy, 14, 17, 18).
In conclusion, while the Russian state faced heavy political, economic, and social challenges
in the 90's, both the commodities boom and Putin's policies have resolidified the Russian state.
Today, the state not only has a fairly stable economy and government, but also popular support.
Though the state has a number of new economic and social challenges ahead, its strong state and
intervention could help it avert these issues and even turn them into new oppurtunities.